DISPUTE SETTLEMENT

Note

This summary has been prepared by the WTO Secretariat’s Information and External Relations Division to help public understanding about developments in WTO disputes. It is not a legal interpretation of the issues, and it is not intended as a complete account of the issues. These can be found in the reports themselves and in the minutes of the Dispute Settlement Body’s meetings.

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DS589: China — Measures Concerning the Importation of Canola Seed from Canada

Canada submitted its first request for the establishment of a dispute panel to examine two sets of measures affecting the importation of canola seed from Canada: measures suspending the importation of canola seed from two Canadian companies; and measures applying enhanced inspections to canola seed imports from other Canadian companies.  Canada requested consultations with China on the matter in September 2019; Canada said that the consultations took place on 28 October 2019 but failed to settle the dispute.

Canada said China alleges repeated detection of quarantine pests in shipments from the two Canadian companies as the basis for the suspensions. It noted that Canada is the only country that has seen the imposition of suspensions and enhanced import procedures for canola seed on its exporters. Canada has been seeking to work with China to restore full market access for Canadian canola seed and to determine the scientific basis for China’s measures. These efforts, which included many letters to the responsible Chinese customs authority and discussions held at various levels, have failed to produce any meaningful results, Canada said. As China is an important export market for Canadian canola seed, China’s restrictive measures continue to have a serious, negative impact on Canadian producers. 

China said it regrets Canada's request and said it was not in a position to accept the establishment of a panel.  The measures were imposed to the extent necessary to protect human, animal or plant life or health and in a transparent and non-discriminatory manner, China said. China has kept in close contact with relevant Canadian authorities on the matter and has responded to requests for information both during and after the consultations. China said it believes it is premature to establish a panel for this dispute and that it is willing to continue engagement with Canada on the matter.

The DSB agreed to revert to the matter at a future meeting if requested by a member.

DS217, DS234: United States — Continued Dumping and Subsidy Offset Act of 2000 (CDSOA)

The European Union reiterated its request that the United States cease transferring anti-dumping and countervailing duties to the US domestic industry, arguing that every such disbursement was a clear act of non-compliance with the rulings on this matter. For the item to be considered resolved and removed from DSB surveillance, the United States must stop fully transferring collected duties, the EU said.

The United States said it has taken all actions necessary to implement the ruling and that, once a member has said it has complied with a ruling, that member should no longer be required to submit status reports on implementation.  The US said the EU was not asking other WTO members to submit status reports where these members have said they achieved compliance with the rulings in question.

The EU countered that the cases cited by the US were different from the CDSOA dispute, where the US was continuing to make disbursements of duties collected to US firms and where the WTO has authorized the EU and other members to impose retaliatory measures against the US for its non-compliance with the ruling. 

Canada thanked the EU for continuing to put this item on the DSB agenda, arguing that as long as the US continues to make such disbursements, the US will be in breach of its WTO commitments.

DS316: European Communities and Certain Member States — Measures affecting trade in large civil aircraft: Implementation of the recommendations adopted by the DSB

The United States said it placed this item on the agenda of the DSB meeting to highlight that the EU has once again not provided WTO members with a status report concerning the dispute. 

The United States noted that on 15 June, the US and the EU reached an “Understanding on a cooperative framework for Large Civil Aircraft” which, among other things, suspends the retaliatory tariffs related to this dispute for five years, sets clear principles that any financing for the production or development of large civil aircraft will be on market terms, and commits the two sides to joint collaboration to address non-market practices in this sector.  As part of this significant effort to enhance cooperation, the United States said it intends to discuss its concerns relating to outstanding EU support measures with the EU bilaterally.  Given this, the US said it was therefore puzzled to see the European Union inscribe the preceding agenda item regarding the CDSOA dispute and call for a US status report while not submitting an EU status report for DS316.

The European Union said it welcomed the fact that the parties in this dispute have now reached an understanding on a cooperative framework for large civil aircraft, and that this has allowed the parties to suspend their respective retaliation measures.

Regarding the legal debate the two sides are having about the proper interpretation of rules related to the submission of implementation status reports, the EU said it continued to believe that whether a party has an obligation to provide a status support or not depends on which stage the proceedings are in; in the case of DS316, the EU has filed an appeal against a compliance panel ruling on its implementation efforts, and that appeal is still pending.  Whether or not the matter is resolved is the very subject matter of this ongoing litigation; thus, the EU considers that in these circumstances it is not required to submit an implementation status report to the DSB. 

The EU said it hopes that the understanding on a cooperative framework for large civil aircraft will allow the parties to resolve their disagreements, including in relation to the provision of status reports to the DSB.

Appellate Body appointments

Mexico, speaking on behalf of 121 members, once again introduced the group's proposal to start the selection processes for filling vacancies on the Appellate Body.  The extensive number of members submitting the proposal reflects a common concern over the current situation in the Appellate Body that is seriously affecting the overall WTO dispute settlement system against the best interest of members, Mexico said for the group.

Nearly 20 members took the floor to reiterate the importance of resolving the impasse over the appointment of new members as soon as possible and re-establishing a functioning Appellate Body.  Many of the delegations described a two-tier dispute settlement system, with a panel and appeals stage, as a core part of the multilateral trading system. Several pointed to the WTO's upcoming 12th Ministerial Conference as an opportunity for progress on the issue.

The United States said it was not in a position to support the proposed decision.  The US continues to have systemic concerns with the Appellate Body, which it has explained and raised over the past 16 years and across multiple administrations.  The US said it believes that WTO members must undertake fundamental reform if the system is to remain viable and credible, and that it looked forward to further discussions with members on those concerns and to constructive engagement at the appropriate time.   

For the 121 members, Mexico came back to say that the fact a member may have concerns about certain aspects of the functioning of the Appellate Body cannot serve as pretext to impair and disrupt the work of dispute settlement. It said there was no legal justification for the current blocking of the selection processes, which is causing concrete nullification and impairment of rights for many members.

The chair of the DSB, Ambassador Didier Chambovey of Switzerland, concluded by noting that the situation of the Appellate Body requires political commitment on behalf of all members of the WTO.   He expressed hope that members will be able to find a solution to this matter as soon as possible. 

Surveillance of implementation

The United States presented status reports with regard to DS184, “US — Anti-Dumping Measures on Certain Hot-Rolled Steel Products from Japan”,  DS160, “United States — Section 110(5) of US Copyright Act”, DS464, “United States — Anti-Dumping and Countervailing Measures on Large Residential Washers from Korea”, and DS471, “United States — Certain Methodologies and their Application to Anti-Dumping Proceedings Involving China.”

The European Union presented a status report with regard to DS291, “EC — Measures Affecting the Approval and Marketing of Biotech Products.”

Indonesia presented its status reports in DS477 and DS478, “Indonesia — Importation of Horticultural Products, Animals and Animal Products.” 

Next DSB meeting

The next DSB meeting will take place on 26 July 2021.

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